Simple Mediation in a Cheap-Talk Game

Chirantan Ganguly and Indrajit Ray ()

Discussion Papers from Department of Economics, University of Birmingham

Abstract: In the Crawford-Sobel (uniform, quadratic utility) cheap-talk model, we consider a simple mediation scheme (a communication device) in which the informed agent reports one of N possible elements of a partition to the mediator and then the mediator suggests one of N actions to the uninformed decision-maker according to the probability distribution of the device. We show that such a simple mediated equilibrium cannot improve upon the unmediated N-partition Crawford-Sobel equilibrium when the preference divergence parameter (bias) is small.

Keywords: Cheap Talk; Mediated Equilibrium (search for similar items in EconPapers)
JEL-codes: C72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta and nep-gth
Date: 2009-11
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ftp://ftp.bham.ac.uk/pub/RePEc/pdf/05-08R.pdf

Related works:
Working Paper: Simple Mediation in a Cheap-Talk Game (2012)
Working Paper: Simple Mediation in a Cheap-Talk Game (2011)
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Persistent link: http://EconPapers.repec.org/RePEc:bir:birmec:05-08r

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